EU Finance

Part of the debate – in the House of Commons at 6:50 pm on 15 June 2004.

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Photo of Jacqui Smith Jacqui Smith Minister of State (Industry and the Regions and Deputy Minister for Women), Department of Trade and Industry 6:50, 15 June 2004

It will be important to consider the way in which we deliver those resources. This guarantee is unprecedented. It provides some certainty in relation to the cliff-edge issue and our continued commitment to regional policy. It also goes some way towards answering the hon. Member for East Carmarthen and Dinefwr, who asked what would happen in the event of a Conservative Government. The nature and methodology of the guarantee, as well as the fact that previous Governments have maintained guarantees from one to another, would make it pretty hard, even for a Conservative Government imposing the cuts proposed by the Conservative party, to go back on it. I am sure that having pushed me so hard today, the hon. Member for Hertford and Stortford would not dare to do so were he to find himself in a ministerial position.

Hon. Members questioned the negotiation process. It is fair to say that the UK has focused minds on the need for radical reform. Indeed, the Commission has already adopted key aspects of our approach. We welcome its proposals for the Council to set the strategic orientation of EU regional policy and its commitment to develop more flexible mechanisms for the delivery of projects—although, as my hon. Friend the Member for Caerphilly argued, we need to align regional policy with regional and national priorities and to get away from the stifling effects of Commission bureaucracy on structural funds projects.

We are at an early stage in the reform process, but we have a considerable amount of support for our proposals. We have strong support from the Netherlands, Sweden, Denmark, Germany, France and Austria, which agree on the need for a smaller structural and cohesion funds budget and a better focus on new member states. Furthermore, the new member states have joined us in questioning the generous funding that would go to richer member states—including Poland, Slovakia, Slovenia, Hungary and the Czech Republic—under the Commission's proposals. Although the negotiations have some way to go, there is a strong view, first, that the Commission's proposals do not deliver what is needed; and secondly, that the radical proposals put forward by the UK require further consideration. I assure hon. Members that we will not only take the tough approach that is required, but build on the support that we have received to ensure that we make the necessary progress.

This debate has enabled us to clarify the Government's objectives as we take forward negotiations on the future of Europe's budget and regional policy.

Unlike some others in the past week, we can appreciate and will argue for the benefits of our membership of the EU for our jobs, trade, prosperity and security. However, that will not be achieved by an unrealistic budget expansion when we rightly expect fiscal discipline in member states. It will be achieved by focusing EU spending where it can demonstrably make a difference and provide genuine solidarity and economic growth and by ensuring that the UK Government can further fund our commitment to strong economic growth and regeneration in the regions and countries of the UK.

We shall continue to argue for that reform package, confident that it is in the interests of the UK and the EU. I urge hon. Members to support the motion, as amended.

Amendment agreed to.

Main Question, as amended, agreed to.

Resolved,

That this House takes note of European Union documents No. 6232/04, Commission Communication: Building our common future: Policy challenges and Budgetary means of the Enlarged Union 2007–2013, and No. COM(04) 107, Commission Communication: "Third report on economic and social cohesion"; supports the Government's efforts to refocus allocations within a budget of 1 per cent. of EU Gross National Income in support of the European Union's goals, with structural funding focused on the poorest member states; and in particular, supports the Government's view that the Commission's overall proposals are unrealistic and unacceptable, that its structural funds proposals are inconsistent with the United Kingdom's objectives for reform, and that the future European Union Budget should be reprioritised and refocused in line with the principles of subsidiarity and spending that adds value at the European Union level and calls on the Government to set out its principles and plans for those objectives and how it will achieve them.